In recent years, there have been a number of reports on the phenomenon in which ferric iron (Fe(III)) is reduced to ferrous iron [Fe(II)] in anaerobic environments, accompanied by simultaneous oxidation of ammonia to NO2−, NO3−, or N2. However, studies on the relevant reaction characteristics and mechanisms are rare. Recently, in research on the effect of Fe(III) on the activity of Anammox sludge, excess ammonia oxidization has also been found. Hence, in the present study, Fe(III) was used to serve as the electron acceptor instead of NO2−, and the feasibility and characteristics of Anammox coupled to Fe(III) reduction (termed Feammox) were investigated. After 160 days of cultivation, the conversion rate of ammonia in the reactor was above 80%, accompanied by the production of a large amount of NO3− and a small amount of NO2−. The total nitrogen removal rate was up to 71.8%. Furthermore, quantities of Fe(II) were detected in the sludge fluorescence in situ hybridization (FISH) and denaturated gradient gel electrophoresis (DGGE) analyses further revealed that in the sludge, some Anammox bacteria were retained, and some microbes were enriched during the acclimatization process. We thus deduced that in Anammox sludge, Fe(III) reduction takes place together with ammonia oxidation to NO2− and NO3− along with the Anammox process.